The Czech National Bank caught the financial markets by surprise in announcing that interest rates would rise a quarter point this week, to 2.0 percent. Bank governor Zdenek Tuma said the board was concerned about inflationary pressures, in large part due to soaring global oil prices. The Czech National Bank now forecasts inflation of 3 to 4.4 percent over the net year. Interest rate decisions by the national bank generally influence the economy with a delay of 12 to 18 months; and Finance Minister Bohuslav Sobotka said that inflation was under control and the rate hike was therefore premature. Several large commercial banks have already reacted to the central bank's move by raising their mortgage rates.
The minimum wage in the Czech Republic will be increased by 6.6 percent as of January, a spokesperson for the Labour and Social Affairs Ministry has said. The ministry plans further increases in July 2006, when the minimum wage is to grow by another 6.2 percent, according to a government proposal. The minimum monthly wage will be 7,660 crowns (or 311 US dollars), compared to the current 7,185 crowns. The minimum hourly pay is to grow to 45.20 crowns (or just under two US dollars). After the second increase, the minimum wage is to reach the equivalent of 3.30 dollars.
The U.S. software giant Microsoft and Czech government agency CzechInvest has announced plans to open an innovations centre in the Czech Republic in January. The centre would help Czech university graduates hone their IT skills, and provide them with work experience in developing new programmes on the Microsoft programme. Tomas Bohrn, head of strategic products at CzechInvest, told the CTK news agency the main goal of the centre is to attract software development projects, as outlined in the agency's new ChipInvest project.
The Netherlands is considering opening its labour market for individual new European Union members next year, and the prospect of Czechs gaining access seems hopeful, Dutch Foreign Minister Bernard Bot told journalists in Prague. Some 1500 Czechs were employed in Holland last year, and fewer than 1000 found jobs there this year, Czech Foreign Minister Cyril Svoboda said, in arguing that Czechs are not a threat to the Dutch labour market. Currently, Britain, Ireland and Sweden are the only old EU members to have fully opened their labour markets.
People who have unresolved restitution claims to land or property have until the end of this year to file their claims. The centre-right opposition Civic Democrats on Tuesday failed to extend the restitution deadline by another four years, largely due to opposition from the Social Democrats and the Communists. The extension by four years was part of a proposed amendment to the law on land.
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